Inland American Retail Management LLC v. Cinemaworld of Florida, Inc.
68 A.3d 457
R.I.2013Background
- Ground lease executed Dec. 16, 2003 for Lincoln Mall theater premises (about 60,000 gross square feet); Inland manages the property and Cinemaworld pays “Additional Rent” including real estate taxes.
- Lease provisions on real estate taxes include Article 9 (Taxes) and Article 25 (Taxes on Tenant’s Property); there is no explicit, uniform method for calculating Cinemaworld’s share.
- Section 9.01 defines “Taxes” as real estate taxes generally and requires Cinemaworld to cooperate to have its premises taxed as a separate parcel, which did not occur.
- Section 9.02(a)/(b) obligates payment of the actual tax amount, with annual true-up against a “reasonably estimate[d]” amount; Section 25.01 requires Cinemaworld to pay its “reasonable share” of taxes when the parcel is not separately assessed.
- The trial court held that Cinemaworld’s share should be calculated by applying a square footage-based fraction to the total tax bill and denied Inland costs; the Rhode Island Supreme Court vacated and remanded for fact-finding on the intended formula.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| How should real estate taxes be allocated under the lease? | Inland: allocation by fair market value of Cinemaworld’s premises. | Cinemaworld: allocation by square footage of leased premises, excluding parking/common areas. | Ambiguity in lease; genuine issue of material fact; remand for fact-finding on the proper formula. |
| Should the case have proceeded on summary judgment given the ambiguity? | Summary judgment appropriate to resolve a clear method of tax allocation. | Ambiguity requires extrinsic evidence and fact-finding. | Summary judgment improper; vacate and remand for determination of intent. |
Key Cases Cited
- Garden City Treatment Center, Inc. v. Coordinated Health Partners, Inc., 852 A.2d 535 (R.I. 2004) (ambiguity in contract terms; use of ordinary meaning)
- Rotelli v. Catanzaro, 686 A.2d 91 (R.I. 1996) (contract terms ambiguous when inconsistent on face)
- Lennon v. MacGregor, 423 A.2d 820 (R.I. 1980) (extrinsic evidence allowed when ambiguity exists)
- D.T.P., Inc. v. Red Bridge Properties, Inc., 576 A.2d 1377 (R.I. 1990) (construction aided by parties’ course of performance; ambiguity exists)
- Andrukiewicz v. Andrukiewicz, 860 A.2d 235 (R.I. 2004) (avoid surplusage; interpret contract to give effect to all terms)
- Elena Carcieri Trust-1988 v. Enterprise Rent-A-Car Co. of Rhode Island, 871 A.2d 944 (R.I. 2005) (contract interpretation; ambiguity review de novo)
- W.P. Associates v. Forcier, Inc., 637 A.2d 353 (R.I. 1994) (look to contract as a whole to determine meaning)
- Reed & Reed, Inc. v. Weeks Marine, Inc., 431 F.3d 384 (1st Cir. 2005) (parties’ course of performance informing intent)